what was the error you're getting when you compile? JAXP, the java XML/XSLT libraries are part of the core Java language since java 1.4.2. JAXP 1.3 XSL Transformations use xalan xsltc for implementation of methods in the Java API, but the implementation packages of the xalan.jar are in the core sdk. Check the compatibility guide:
http://java.sun.com/j2se/1.5.0/docs/guide/xml/jaxp/JAXP-Compatibility_150.html#xsltXpath. Seems to say you can use xalan.jar from apache without package conflicts because of new package naming. I think that means if you use a xalan package name in a custom element, it won't be found in the sdk. So, try xalan.jar in the classpath, assuming you need some extension in xalan that isn't implemented in the javax.xml of the sdk.